AMENDMENTS OF EXISTING POWER TO INCUR DISCRETIONARY EXPENDITURE (Hansard, 13 June 1989)

§ Lord James Douglas-Hamilton
I beg to move amendment No. 244, in page 36, line 11, leave out 'this section' and insert 'subsections (2) to (9) below'.

Mr. Deputy Speaker
It will be convenient to discuss at the same time Government amendments Nos. 123, 245, 124 and 246.

§ Lord James Douglas-Hamilton
The purpose of this series of amendments will be welcome. It is designed to remove an anomaly which came to light as a result of the tragic events at Lockerbie last December. Obviously, tribute has been paid to the magnificent efforts of local authorities, especially but not exclusively the authorities most directly involved.
As part of the wider response, local authorities in England and Wales wish to contribute to the disaster fund that was set up by Dumfries and Galloway regional council, but it was found that the power which local authorities in England and Wales would normally use to make such a contribution—section 137(3) of the Local Government Act 1972—did not extend to cover appeals set up by Scottish local authorities unless the civic head of an English or Welsh authority was associated with the appeal.
The series of amendments rectifies that situation on both sides of the border reciprocally. The effect is that where the civic head of a local authority launches an appeal, any local authority will be able to contribute.

§ Mr. Maxton
My hon. Friends and I welcome this series of amendments, which will prove extremely useful. I am sure that Scottish local authorities will now wish to contribute towards the Hillsborough fund in the same way that English local authorities wish to contribute to the Lockerbie appeal.

§ Sir George Young (Ealing, Acton)
I beg to move amendment No. 9 in page 37, leave out lines 28 to 43.

Mr. Deputy Speaker
It will be convenient to discuss at the same time the following amendments: No. 8 in page 37, leave out lines 44 to 48.
No. 282, in Schedule 2, page 139, leave out lines 1 to 21.

§ Sir George Young
These three amendments which stand in my name enable the House to consider a matter on which the Committee was unable to reach a decision without the casting vote of the Chairman. They deal with the important matter of how voluntary organisations of the metropolitan counties are funded. In a nutshell, the Government wish to remove the section 48 funding power introduced in the Local Government Act 1985.
There are two arguments against what the Government plan to do, one of principle and one of practice. The argument of principle is that it is seen to be in conflict with undertakings given in good faith at the time of abolition which set up a secure funding framework for voluntary organisations in metropolitan counties which covered more than one local authority area.
The argument of practice against what the Government plan to do is that at a time when we are trying to reduce manning in local authorities, the arrangements proposed by the Government would increase manpower in those local authorities that have to scrutinise the voluntary sector and would involve the complex relationships that exist between local authorities as they try to justify their spending under section 137.
The Government argued that abolition of domestic rates gave an opportunity to abolish section 48 and bring the mets into line. They undertook to discuss with the local authorities the practical difficulties that we came across in Committee. In fairness to the Government, they have held discussions with representatives of the voluntary sector to try to find a way through the problem.
Having seen the minutes of those meetings, I remain convinced that it would be right for the Government to abandon the strategy on which they are embarked and to leave section 48 alone as a separate funding power in its own right for the voluntary sector and the metropolitan counties. It would reassure the voluntary sector, which has now established a funding arrangement under the new regime, if the Government said that, on reflection, their strategy is not, perhaps, the best one and that it would be better to leave section 48 as it stands.

§ Mrs. Virginia Bottomley
The Government have given careful consideration to the points raised in Committee, especially those made by my hon. Friend the Member for Ealing, Acton (Sir G. Young). As he said, section 48 was introduced to help voluntary organisations after the 839 abolition of the GLC. Many voluntary organisations were performing an excellent function and it was thought right that they should receive assistance, especially as they were losing the product of the 2p rate from one tier of local authority.
We have now carried out a complete review of the limit on expenditure under section 137. We intend to ensure that spending for which there is no other statutory basis should be achieved on a different assumption—that it should be £5 per head of the adult population. There was great debate in Committee about how the section 137 proposals would work in with the section 48 scheme. There was an anomaly at the time of the abolition of the GLC and in the context of the new regime it was difficult to justify extending the arrangement.
We shall accept my hon. Friend's amendments. We have reconsidered our proposals and agreed upon a better basis. Clause 29(9) is directed at redressing the anomaly. It is a precise provision that states clearly that any expenditure under a section 48 scheme that cannot be attributed to a specific power is to be counted against the section 137 limits of the constituent councils.
As my hon. Friend said, it would impose an unnecessary burden on the schemes if it had to be assessed whether each grant could be justified under powers other than under section 137. It was argued that it would make the construction of the budget—especially in London, with 33 authorities involved—extremely difficult if each had to consider not only the cash required but the impact of individual grants on their own programmes.
As a result of meetings with the staff of the London section 48 scheme and the lead authorities of other schemes, we decided to reconsider the matter. We propose to build on the fact that the section 48 schemes have now settled into fairly regular patterns of spending. My hon. Friend's amendment will remove the special treatment of section 48 expenditure that cannot be referred to any specific power of the authorities. Instead, we shall reduce the limit on expenditure under section 137 for the constituent authorities of the section 48 schemes by an amount approximately equal to their expenditure under section 48, and which, elsewhere in the country, would have to score against the section 137 limit.
We want to discuss further with the authorities concerned the precise amounts involved. We believe that section 48 expenditure—which has made an important contribution to voluntary organisations in the London and other metropolitan areas—as well as the possibility of section 137 expenditure will be safeguarded.

§ Mr. Soley
We are always grateful for small mercies. It took a near defeat for the Government in Committee to make them reconsider the matter. Indeed, it was only the Chair's casting vote that saved them.
It should be put on the record that not only the former GLC area is affected, but metropolitan areas generally. Indeed, in Committee on the abolition Bill we warned the Government that the voluntary sector would be in some difficulty. The voluntary bodies have been worried and the hon. Member for Ealing, Acton (Sir G. Young) has done them a service. However, I do not think that the amendment goes far enough and if the Government are serious about helping the voluntary sector they will have to go further.

§ Sir George Young
I was delighted to hear what my hon. Friend said. I know that her words will be welcomed by the voluntary organisations in London and in the other metropolitan counties. Nine minutes past 12 is not the time to engage in a detailed discussion about how the reduction in section 137 will take place. However, I note that she has undertaken to negotiate with the people concerned.
It is right to pay tribute to the work of Ministers, whose commitment to the voluntary sector has never been in doubt. I welcome the fact that they have shown flexibility —which I always knew was there—in coming to the decision to leave section 48 as a funding power in its own right.